The OECD report Scaling Up Public Financial and Non-Financial Support for SME Sustainability Innovations and Good Practices, released on 5 November, 2025, explores how public financial and non-financial support mechanisms can help SMEs achieve sustainable innovation. Representing over 90% of businesses globally, SMEs play a critical role in global sustainability efforts. Yet, they still face significant challenges, including limited access to finance, regulatory burdens, and gaps in expertise. Public support is therefore needed to help SMEs address these challenges.
The report outlines a range of financial instruments designed to support these SMEs in the green transition, from traditional instruments, such as green loans, guarantees, and leases, to more innovative financing solutions, such as sustainability-linked loans, revenue-based financing, and property-linked financing. Additionally, non-financial instruments such as advisory services, capacity-building programs, and technical assistance can help SMEs overcome knowledge gaps and administrative challenges.
Drawing from the analysis of over 20 case studies from several countries, the report offers key lessons on how to design and implement effective public support programs. Among these, the report stresses the importance of a public-private synergy: public support shall focus on areas where private capital is most insufficient, and encourage the private sector to invest in green sectors through blended financing mechanisms. Moreover, for SMEs to face less administrative burden, the report suggests the further simplification of eligibility criteria and reporting processes, as well as the leveraging of digital tools that can help streamline applications, automate reporting, and improve monitoring. Finally, the study concludes that, to promote sustainability, SMEs shall be encouraged to invest in outreach and capacity-building efforts for them to better understand gaps and navigate green and suitable financing options.
Source: OECD
